2007-01-18 09:16:23 · 4 answers · asked by soberlunatic 3 in Business & Finance ➔ Taxes ➔ United States
Why don't people read questions more carefully before providing answers? I already stated that I PAID BACK my student loans and wanted to know if this will benefit my return for 2006.
2007-01-18 14:21:01 · update #1
Not by itself. You only get a deduction for interest paid, not the loan itself. In fact, what it will do is give you fewer deductions in 2007 because you will have no interest to deduct.
You can console yourself with the fact that you will have more money in your pocket because you are no longer making loan payments. After all, for every dollar that you pay out of your own pocket to the loan company you get at most 35 cents back in taxes. In reality it is much less than that. But if you don't have to pay the dollar, do you really care about the 35 cents at tax time?
2007-01-18 09:23:19 · answer #1 · answered by skip 6 · 2⤊ 0⤋
It depends on how long you have been paying on your loan. The IRS allows you to deduct interest paid on student loans on your tax return. Overall, if you have the money, pay off the loan so you do not keep paying interest. The interest you are paying is more than you would earn on a savings account.
2007-01-18 17:22:00 · answer #2 · answered by Lori W 2 · 1⤊ 1⤋
I believe the answer is yes. I think that you are entitled to a certain deduction from your taxes if you have been paying your loans off.
2007-01-18 17:20:19 · answer #3 · answered by Beachman 5 · 0⤊ 1⤋
You can deduct any interest paid in 2006 from your gross income. You don't have to itemize to do this.
2007-01-18 23:50:07 · answer #4 · answered by Judy 7 · 1⤊ 0⤋